You don't say it, but your problem may be that you're trying to start the stepper at full speed. If so, there is a maximum speed (which varies somewhat with load) beyond which a stepper will not accelerate, and this speed is normally well below what you can reach with a gradual increase in speed. Google on "stepper motor torque curve".
The problem is that, with a 4-phase stepper such as you are using, if the shaft angle lags more than 2 step angles behind the commanded angle, the torque reverses and the motor sits and vibrates and makes horrible noises. This is not, technically speaking, a stall condition, where the shaft does not move at all.
The torque-speed curve for your motor can be found at http://www.kelinginc.net/KL34H2120-42-8AT.pdf and indicates that the motor can be run at 5000 steps/second, which suggests that your problem is your attempt at fast start.
If, on the other hand, you've already tried a slowly increasing step rate while running, then you probably do need a heftier motor. However, my calculations for a .144 hp motor at 10 rps gives about 2 Nm torque, and the linked torque curve for your stepper is about the same, so I wouldn't expect a problem. Unless, of course, you've modified your mechanical setup somehow.
Stepper motor power is defined by both speed and the inertia of the load. Remember that if you are driving a stepper motor at a low speed, you are accelerating the load from a dead stop to the next step, then decelerating the motor to a stop. The motor can go full current accelerating on each step, because non of the angular momentum is retained from the last step. Motor can get hot, but you probably won't hurt the controller. You may "lose your place" by missing steps if you try to run too fast.
If the motor load and speed are in the "sweet spot," the system can be more efficient, but since there is no feedback the load and inertia would have to be matched to the motor characteristics. Manufacturers sometime give speed specs under optimal conditions, so be careful. In general, you would not want to use steppers in applications where you are running everything continuously. They are good for applications where cost needs to be low and efficiency is not required (usually low duty cycle). Your controller probably allows you to make some current settings to help keep the motor from overcurrent condition.
Torque is directly proportional to current, and increasing voltage allows you to run at higher speeds.
In answer to your questions, you can experience heating in the motor if the load varies. A controller will continue to pulse when the motor is stalled, but since none of the power is going into work, it all goes into heat. Run as slow as you can and keep your max current low so that when these conditions occur you won't overheat. Keep your duty cycle low if possible.
When you choose a lower current, you limit the speed because the motor will accelerate more slowly, requiring more time to get to the next step. Microstepping might be a little less efficient, but with smart controllers it is probably not much, and it will definitely "smooth out" vibration when running. Running at a lower current should reduce the power per controller, and the power draw when stalled is about the same as max load, with the caveat that things are getting heated. Get some big heat sinks and turn the motor power off if you don't have to hold torque. Forced convection cooling might be an option to consider.
Best Answer
The inputs on the stepper driver module are optical isolators, in other words, LEDs. The manufacturer provided connections to both sides of the input, but you can tie one side to +5V (from the S7) as indicated on the driver module silk-screen writing. To actuate the control signal the S7 provides a logic low, 0V, or ground to the other input. Your control signal is in effect providing power to turn on the internal LED which passes the control signal through optically while maintaining electrical isolation.
If +5 volts in unavailable +24 vdc could be used with a 2.2K ohm resistor in line to limit the LED current to about 10 mA. Also you may vary the parameters to accommodate the output choices available from the S7. The goal is to provide about 10 mA through the opto-isolator to turn the LED on and off under your control.
Mechanical relay outputs for the S7 PLC will not work though because relay outputs can bounce a few times in a millisecond and the driver will interpret that as multiple motor steps. Solid state outputs will work. Digital outputs are the most common method.